The Home Buyer Rescission Period (HBPP), previously known as “Homebuyer Protection Period” and “cooling-off period,” is expected to be implemented province-wide in January 2023. With many details yet to be determined by the BC Government, we have been hearing from REALTORS® with questions. In this post we answer some of those questions.
Bookmark this page since we’ll be updating this post as we learn more details from the BC Government. In addition, if you are interested in subscribing to BCREA’s regular advocacy newsletter, please email [email protected].
What is the Home Buyer Rescission Period (HBRP)?
The HBRP, commonly known as a “rescission period,” gives buyers the right to withdraw from a purchase agreement within a specified period of time after an offer is accepted. Without a rescission period, if a buyer wishes to terminate a contract, they would need to negotiate with the seller and would typically face significant financial penalties or legal ramifications.
What properties will be subject to the HBRP?
The policy will apply to the following types of structures:
detached homes,
semi-detached homes,
townhouses,
apartments in a duplex or other multi-unit dwelling,
residential strata lots,
manufactured homes that are affixed to land, and
cooperative interests that include a right of use or occupation of a dwelling.
What are REALTORS®’ requirements to inform their clients?
All real estate licensees must provide general information on the HBRP to all consumers through a form approved by the Superintendent. Licensees must also provide an additional mandatory disclosure at the time of preparing an offer on behalf of a buyer and presenting an offer to a client, containing all of the following notices:
the HBRP cannot be waived,
the rescission period time length,
the dollar amount of the rescission fee,
the deposit handling, and
HBRP exemptions.
Are brokerages required to retain a copy of a rescission notice?
Yes, brokerages must retain a copy of rescission notices that it prepares and is served to the seller or that the brokerage receives.
How are sellers supposed to receive rescission notice?
Buyers must serve rescission notice on the seller through one of the following methods: registered mail, fax, email with read receipt, and personal service. Rescission notices must contain:
address, PID or description of the property,
names and signature of the buyers,
name of the seller(s), and
date of notice.
What is meant by “three business days?”
For the HBRP, “business day” means a day other than a Saturday, Sunday or a statutory holiday. The rescission period is three business days, beginning the day after a contract is signed.
How much is the rescission fee?
Buyers who use their right to rescind will have to pay a fee of 0.25% of the purchase price. For a $1,000,000 home, this would result in a $2,500 fee paid to the seller.
How does a HBRP impact other subjects in my contract?
Other subjects are unaffected by the HBRP.
What about For Sale by Owner (FSBO) properties?
The HBRP applies to all residential real estate sales, which includes FSBO.
Can the HBRP be waived?
The HBRP cannot be waived.
Are there any exemptions?
. There are narrow exemptions, including:
sales of residential real property located on leased land,
sales of leasehold interest in residential real estate,
sales at auction,
sales by way of an Assignment of Contract,
pre-construction sales of multi-unit development properties, which are already subject to a seven-day rescission period, and
sales under a court order or supervision of a court.
Will the termination fee be taken from the deposit?
If a deposit is held in trust, brokerages must release the rescission fee to the seller upon rescission. The balance, if any, is returned to the buyer, despite what may be provided in the contract.
Who will receive the termination fee?
The rescission fee amount is provided to the seller.
How can I learn more about the HBRP’s details when they are available?
This blog post will be updated as we learn more about the HBRP from BCFSA and the Ministry of Finance. In addition, you can follow BCREA’s advocacy news, which will include updates on the HPRP, by subscribing to our Advocacy Update. To do so, please email [email protected].
What are the next steps for BCREA?
BCREA staff are updating and creating new Standard Forms and updating professional development courses to ensure REALTORS® are equipped with the tools needed to serve effectively clients. Staff are also meeting regularly with BCFSA to try and answer outstanding questions.
Will the Ministry of Finance implement additional consumer protection measures?
In May, BC’s real estate regulator, the BC Financial Services Authority, published an independent report, “Enhancing Consumer Protection in BC’s Real Estate Market,” which offered advice and recommendations to the Ministry of Finance to improve consumer protection. There was significant overlap between BCFSA’s advice and BCREA’s “A Better Way Home” paper.
The Ministry of Finance has not indicated whether they will implement additional consumer protection measures within the coming months.
What policies do BCREA recommend to improve consumer protection?
Earlier this year, BCREA has published a white paper, “A Better Way Home,” which included more than thirty recommendations to improve consumer protection. BCREA does not support a HBRP, because it is not likely to have a meaningful impact on consumer protection and may have unintended consequences on affordability.
If you have any additional questions, we encourage you reach out and share them at [email protected].
Below are a list of other resources on the HBRP:
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TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
